• Michael Wellings

5 Steps to Reducing Healthcare Costs in Retirement

Updated: Mar 4, 2019



Health care costs will be the biggest expense for most retirees. It’s not a pleasant prospect, but it is a reality.

A 65-year-old couple that left the workforce in 2017 will spend an average of $275,000 to cover medical expenses through retirement, according to the latest retiree health care cost estimate provided by Fidelity Benefits Consulting. That’s a 5.8% increase from the estimate of $260,000 in 2016.

We can’t just sweep this under the rug and hope it goes away. Instead, let’s take proactive steps to deal with the challenges.

This list is not all-inclusive, but here are five ways to help put yourself in the driver’s seat on health care.

1. An apple a day

We all learned that adage when we were kids. Even if we don’t always express our gratitude, we are appreciative of our physician. He or she is happy to see us when we need care, but our doctor also finds joy when we own the preventative measures that are suggested.

Stay active, remain social, exercise regularly, eat well, and do your best to stay healthy and out of the doctor’s office, save your regular preventive and maintainance care. It will save you money and increase your sense of well-being.

2. The red pill or the blue pill?

Late last year, The Washington Post ran a story entitled, “The Other Big Drug Problem: Older People Taking Too Many Pills.”

Researchers estimate that 25% of people ages 65-69 take at least five prescription drugs to treat chronic conditions. It jumps to nearly 46% for those between 70 and 79.

Did you know at least 15% of seniors seeking care have suffered an adverse drug event (American Family Physician)? About half were believed to be preventable. In some cases, “polypharmacy” has been associated with an increased mortality risk.

Let me be clear here: Make no changes before consulting with your health care provider. But, in addition to the cost savings, you may reap health benefits by cutting back on all the pills. Again, please talk to your doctor to determine where you can cut back.

3. Captain’s log supplemental

You know it and I know it—Medicare doesn’t cover all the incidentals, and it won’t cover costs while traveling abroad. While there will always be out-of-pocket expenses, consider a Medicare supplemental plan, sometimes called Medigap, which may pick up some of the costs Medicare shuns.

Prices will vary depending on benefits. While there is an outlay of funds to secure the insurance, it can help prevent nasty surprises and can pick up the slack where Medicare Parts A (hospitalization) and B (outpatient and physicians services) end.

Another option is called Medicare Advantage, which allows you to purchase an all-in-one managed care plan. Medicare Advantage includes Part A and Part B, many costs not covered by Parts A and B, and it may also include Part D (prescription drug coverage).

If you have enrolled in Medicare Advantage, it’s illegal for anyone to sell you a Medigap policy, according to Medicare, unless you are unenrolling and moving to traditional Medicare.

I know this may sound complicated. You may want to consult with your doctor, family, and friends. Of course, I’m available if you need direction. That’s what I’m here for.

4. Don’t overlook the obvious

Falls are a threat to the health of older people and may reduce their ability to remain independent.

More than 95% of hip fractures are caused by falling, usually falling sideways, according to CDC data from “Important Facts about Falls.”

Falls are the most common cause of traumatic brain injuries. In 2015, medical costs from falls totaled more than $50 billion, with Medicare shouldering 75% of the costs.

How to prevent falls:

  • Talk to your doctor and evaluate your risk.

  • Consider strength and balancing exercises per doctor’s guidance.

  • Have your eyes checked.

  • Make your home safer—I’ll spend a moment on this one. Are there uneven floors, carpets that needs to be stretched, or things you can trip on? Add railings on both sides of the stairs. Add a grab bar inside and outside your tub or shower and next to the toilet. Simple preventative measures will pay health and cash dividends.

5. Smart is as smart does

Become a smart shopper. Find the cheapest place to get your prescription drugs and consider generic versions. Some services are now free, including mammograms, prostate screenings, and annual physicals.

Check with your insurance provider regarding various tests. Insurance companies negotiate much lower rates with facilities that specialize in specific tests. For example, hospitals and ERs can be much costlier for an MRI than an outpatient MRI center.

Catch a problem early and you can save money and heartache.

Health care costs are like taxes. You can’t avoid them. But a smart and informed shopper can reduce the financial burden. That’s money in your pocket, and it can lead to a healthier and more enjoyable retirement.

If you have any questions, let’s talk. We're simply an email or phone call away.

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